Correlation Between INTNED and Marfrig Global

Can any of the company-specific risk be diversified away by investing in both INTNED and Marfrig Global at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining INTNED and Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between INTNED 4625 06 JAN 26 and Marfrig Global Foods, you can compare the effects of market volatilities on INTNED and Marfrig Global and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in INTNED with a short position of Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTNED and Marfrig Global.

Diversification Opportunities for INTNED and Marfrig Global

-0.59

Correlation Coefficient

INTNED  Marfrig Global

Excellent diversification

The 3 months correlation between INTNED and Marfrig is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding INTNED 4625 06 JAN 26 and Marfrig Global Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfrig Global Foods and INTNED is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on INTNED 4625 06 JAN 26 are associated (or correlated) with Marfrig Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfrig Global Foods has no effect on the direction of INTNED i.e., INTNED and Marfrig Global go up and down completely randomly.

Pair Corralation between INTNED and Marfrig Global

Assuming the 90 days trading horizon INTNED 4625 06 JAN 26 is expected to under-perform the Marfrig Global. But the bond apears to be less risky and, when comparing its historical volatility, INTNED 4625 06 JAN 26 is 7.86 times less risky than Marfrig Global. The bond trades about -0.16 of its potential returns per unit of risk. The Marfrig Global Foods is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  284.00  in Marfrig Global Foods on September 19, 2024 and sell it today you would earn a total of  5.00  from holding Marfrig Global Foods or generate 1.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	71.43%
Values	Daily Returns

INTNED 4625 06 JAN 26  vs.  Marfrig Global Foods

INTNED 4625 06

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTNED 4625 06 JAN 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INTNED is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Marfrig Global Foods

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marfrig Global Foods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Marfrig Global showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INTNED and Marfrig Global

The main advantage of trading using opposite INTNED and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTNED position performs unexpectedly, Marfrig Global can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Marfrig Global will offset losses from the drop in Marfrig Global's long position.

The idea behind INTNED 4625 06 JAN 26 and Marfrig Global Foods pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.